Bush gives Big Three stay of execution

And still does Richard Shelby’s bidding

I’m not quite as agog as some another bloggers about President Bush’s announcement he will extend a $17.4 billion lifeline to GM and Chrysler, and the reported lucidity of thought behind the announcement, but I am pleasantly surprised, overall. I’m also surprised there’s no bankruptcy attached, but not totally; read on.

That said, as the AP notes, the bailout has some reorganization plan requirements like the House bailout bill of last week did. And, although there’s no bankruptcy attached, Bush did see this as the opportunity to back-door Richard Shelby’s anti-union ideas. The bailout calls for the Big Three to have wage (and bennies, I assume) and work rules competitive with foreign makers by the end of this year.

The Politico has more details.

Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
• Firms must provide warrants for non-voting stock.
• Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
• Debt owed to the government would be senior to other debts, to the extent permitted by law.
• Firms must allow the government to examine their books and records.
• Firms must report and the government has the power to block any large transactions (> $100 M).
• Firms must comply with applicable Federal fuel efficiency and emissions requirements.
• Firms must not issue new dividends while they owe government debt.

Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
• Reduce debts by 2/3 via a debt for equity exchange.
• Make one-half of VEBA payments in the form of stock.
• Eliminate the jobs bank.
• Work rules that are competitive with transplant auto manufacturers by 12/31/09.
• Wages that are competitive with those of transplant auto manufacturers by 12/31/09.

Well, the wage rules aren't mandatory, at least.